Is America Ready for a Welfare State?

Jorge G. Castañeda

Several leading Democratic candidates in the 2020
US presidential race favor introducing elements of a modern welfare state in
health care, childcare, and education. Whether a Democrat wins or loses in
2020, social democracy has re-emerged in American politics for the first time
since the 1930s.

MEXICO CITY – As a foreigner currently writing a
book about Americans, I am encouraged by some signs I see as the 2020
presidential campaign heats up. In particular, with the race for the Democratic
nomination fully underway, many of the candidates are advocating bold policies
that address some of the most important challenges the United States has faced
in decades.

Their most striking proposals would create elements
of a modern American welfare state in areas such as health care, childcare, and
education. It remains to be seen whether these proposals will survive the heat
of a presidential election campaign. But whether a Democrat wins or loses in
2020, social democracy has re-emerged in American politics for the first time
since the 1930s.

This is a potentially momentous development. For
much of its history, and certainly since Alexis de Tocqueville traveled through
the republic in the 1830s, the United States was a middle-class country. Or,
perhaps more accurately, it denied the rights of a majority of the population –
including African-American slaves and Native Americans, as well as white women
– while affording unprecedented equality to the rest.

America’s middle class swelled and prospered more
or less continuously over the next century and a half, effectively preventing
the emergence of the sort of welfare state that other rich countries began to
establish from the late nineteenth century onward. True, the US introduced a
federal old-age pension (Social Security) in the 1930s, and established the
government-funded Medicare and Medicaid health-insurance programs in the 1960s.
But as long as middle-class Americans enjoyed full employment and relatively
high wages, bolder ideas, such as universal government-funded health care and
proper unemployment insurance, remained off the mainstream political agenda.

This was especially true during the three decades
from the end of World War II until the late 1970s. But then America’s economic
fortunes started to dip. For a variety of reasons, including President Ronald
Reagan’s economic policies, globalization, and a loss of American
competitiveness, inequality began to rise, real (inflation-adjusted) wages and
incomes stagnated, and the middle class started to shrink.

These negative trends persist today, and partly
explain Donald Trump’s presidential election victory in 2016. Moreover,
increasing economic hardship made the case for a plain-vanilla US welfare state
increasingly self-evident. But only now are mainstream American politicians
openly advocating this.

To varying degrees, the
principal contenders for the Democratic nomination in 2020 have espoused many
of the tenets of a modern welfare state. So much so, in fact, that Trump and
the Republican Party have attacked them for wanting to bring
socialism to America, charging
that Democrats will turn the US into Venezuela.

Many Democratic candidates have called for a major
expansion of government-funded health care. But their proposals – a single-payer system (“Medicare for All”), a
national health service, or something else – do not all mean the same thing.
Several contenders – including Bernie Sanders, Elizabeth Warren, Kamala Harris,
and Beto O’Rourke – do not entirely agree on the details of such schemes, or
simply have not spelled them out. But after former President Barack Obama
attempted to fix the American health-care disaster with halfway measures –
arguably the most that was politically feasible at the time – those vying for
the Democratic nomination clearly have more ambitious plans.

Warren, meanwhile, has proposed the introduction of
universal childcare, to be financed by a wealth tax on fortunes above $50
million. Such a tax may sound revolutionary, but it’s not. As the former US
Secretary of Labor Robert Reich often points
out, the US has long imposed highly regressive
property taxes that affect those whose only asset is their homes.

Democratic candidates have also proposed universal
free tuition at public colleges, an increase in marginal income-tax rates to
pre-Reagan levels, and a carbon tax on non-renewable energy sources. All of
these ideas are exciting, innovative, and disruptive – and would have been
confined to the extreme-left fringe just four years ago. Implementing all of these
policies would not create an American welfare state overnight, but the US would
look a bit more like Scandinavia.

Furthermore, some Democratic candidates want to
reform America’s dysfunctional political system to increase the chances of
introducing such a welfare state. In particular, Warren recently proposed abolishing
the Electoral College, so that US
presidents would instead be elected by a national popular vote. In 2000 and
again in 2016, the Democratic presidential candidate won the most votes overall
but did not win the election.

Warren’s proposal will not succeed in the near
term. But the fact that a mainstream candidate is promoting it suggests that
Americans may be thinking more seriously about how their political system works
(or doesn’t).

Several obstacles stand in the way of bringing
these welfare-state proposals to fruition after 2020, starting with the
possibility that Trump will be re-elected. Moreover, the Democratic nominee may
veer away from radical, substantive planks in the party’s platform, and opt for
a more moderate program in the hope of attracting enough centrist voters to
defeat Trump. And even if a Democrat who supports many of these welfare-state
reforms is elected president, they may be unable or unwilling to implement
them.

Nonetheless, leading Democratic candidates are
advocating welfare-state policies that seemed almost unthinkable in America
until recently. As these ideas gain traction among the country’s squeezed
middle class, they are changing the terms of US political debate. For that
reason alone, the 2020 presidential campaign already seems light years away
from the bromides and vacuous invective of 2016.